New Media forms largest US newspaper group after $1.4bn Gannett takeover
US local media giant New Media Investment Group has bought rival Gannett for $1.4bn (£1.1bn), forming the country’s largest newspaper owner.
Virginia-based Gannett owns USA Today, as well as over 160 UK publishers including Newsquest and online marketing firm Reachlocal.
Read more: Media group Future buys US publisher Smartbrief for up to $65m
New Media said the deal is expected to deliver cost savings of up to $300m each year.
The merger will fuel the media group’s digital transformation, as it battles a decline in revenue from print publications.
Gannett has invested millions in the last few years to beef up its digital footprint, but missed targets for second-quarter revenue earlier this week.
“We believe this transaction will create value for our shareholders, greater opportunities for our employees, and a stronger future for journalism,” said Michael Reed, New Media chairman and chief executive.
“Uniting our talented employees and complementary portfolios will enable us to expand our comprehensive, hyperlocal coverage for consumers, deepen our product offering for local businesses, and accelerate our shift from print-centric to dynamic multimedia operations.”
Read more: Reach boss Simon Fox to step down as publisher posts strong digital growth
Earlier this year Gannett rebuffed a $1.36bn hostile takeover bid from newspaper chain MNG Enterprise, which also tried to put nominees on the company’s board.
New Media, which owns the largest chain of local US papers, is run by Fortress Investment Group, which in turn is owned by Japanese giant Softbank.
Main image credit: Getty